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Early success fuels funding in online beauty start-ups like MyGlamm, others

Growth at brands like Nykaa, MyGlamm, Sugar Cosmetics and Beardo has picked up, with recovery being stronger going into 2021

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Between Covid-19 winners and losers, one segment has rocketed: online beauty and personal care. While subdued in the initial months of the lockdown, growth at brands like Nykaa, MyGlamm, Sugar Cosmetics and Beardo has picked up, with recovery being stronger going into 2021.

Sure, e-commerce boomed as people could not (some still cannot) visit stores, but higher sales of beauty products – which includes makeup, fragrance, wellness and personal care consumables, mostly “non-essentials” – is a curious case. Analysts say the trend has been made possible because of two reasons: higher household savings during the lockdown, and an increase in orders, particularly from women, in tier II and tier III cities.

This has resulted in a blockbuster first quarter for the industry. A week back, MyGlamm, a direct-to-consumer online brand, raised $25 million at a valuation of $100 million. The start-up is only four years old. Purplle, an online marketplace, raised $45 million, while private label brand Sugar Cosmetics bagged $21 million.

To add to the list, Nykaa, the category leader, closed two funding rounds in the pandemic year 2020. It is now said to be planning an initial public officering, at a reported valuation of $3 billion. “A lot of these brands have been very successful in creating a direct connection with consumers, with the right marketing, targeting and price points. The early success and acquisitions in the space have also been a big boost,” said Pinaki Mishra, partner and consumer leader at EY.

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